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Everything posted by Jimbo

  1. THOUGHTS ON THE DOUBLELINE TOTAL RETURN BOND FUND I always like to look at the portfolio composition of the DLTRBF to see how Jeffrey Gundlach is tracking. Its outperforming the index (but given the index is treasury heavy thats a very easy thing to do....just stuff your fund with higher yielding mortgage bonds....a pretty easy thing to do....and outperformance is guaranteed). A much better index to measure the fund's performance against would be a pure mortgage bond index. Which given the myriad of mortgage bond tranches out there would be a fiendish beast to create.
  2. THE FEDS MANTRA The visible stated mantra: "Inflation is good" The invisible unstated mantra: the one they don't tell you about, the one on the other side of the coin to mantra one: "Bonds are bad"
  3. THE LONG BOND CRASH The big bail outs in March 2020 financed by borrowing and then printing set up the big long bond crash.
  4. TEN YEAR BOND YIELD Should be around 7%. How much more punishment are bond holders going to take. The FED will be the only bond buyer soon. I note that the ULTRAPRO SHORT 20+ YEAR TREASURY ETF has returned 50% over the past year!!!!!!!! The smart money play is still short the long bond. And long hard assets financed with cheap long term debt i.e. long inflation. The panic move from long bond ETF's into short bond ETFs continues. But you still lose the inflation rate each year on short bonds as well. Still a losing trade.
  5. WAITING FOR THE BOND SIGNAL The market wants to go down but is waiting for bond rates to blow out some more. For this to significantly happen the bond market in turn waits for some more inflation confirmation data. Its all a waiting game right now.
  6. THE FEDS $500 BILLION REVERSE REPO Thats a risk off action. A lot of the smart money has cashed in their chips and gone risk off for the rest of the year. So the FED had to mop up $500 billion of loans to hedge funds etc that was no longer needed for speculative leveraged plays. This is probably due to the Archegos blow up and the banks tightening their lending criteria and increasing their margin requirements. This will probably make short squeezes a lot less frequent going forward. The world has been awash in cheap speculative credit priovided by the FED that h
  7. SO INFLATION IS ABOUT 4% That makes the yield on the ten year bond minus 2.5%. A nice inflationary gift to assets with high J Numbers (I decided to rebrand the IG number to a J number ...after my nom de plume) J Number Definition: The J number is the annual increase in the owners equity value in an asset's price, above the rate of inflation, due to the transfer of the real value of the debt attached to that asset, through the inflationary mechanism, from the lender of the debt to the owner of the asset.
  8. AS GOES BITCOIN SO GOES THE TAPE The fall in Bitcoin is depressing the whole stock market index. Bitcoin has been the leading ponzi asset of the whole bull market...along with Tesla. Anyway as I said before the smart money is rotating out of Bitcoin into Ethereum.
  9. CORRECTION I said Vivint was the overvalued stock of the week. Should have called it Sunrun ....they took Vivint over.
  10. THE THREE STAGES OF GOVERNMENT FINANCING The first stage is where expenditure if financed by taxation. This is the healthy stage. The secound stage is where expenditure is financed by borrowing. This is less healthy. The third stage is where expenditure is financed by money printing. This is not healthy at all. We are now entering this stage. The third stage is the bondholders are bagholders stage.
  11. THE GREAT BOND ESCAPE Continues A nice (i.e. bad) CPI print helps of course. The ten year treasury now yielding negative 2.5 % Bondholders are bagholders
  12. OVERVALUED STOCK OF THE DAY Vivint Solar. Market cap $4.6 billion. Annual sales $350 million. Negative annual free cash flow of $600 million. So many massively overvalued stock out there!!!!!!!
  13. THE FALSE NARRATIVE AWARDS There should be an annual award ceremony for the organisation or individual who comes up with the best false narrative during the year. So far the FED and Chairman Jay are in the lead with the wonderful and convincing "Any Inflation will be temprary" narrative Designed I presume to convince the bond holders not to make another break out attempt from the great bond gulag. Yes...it appears Jay is in line for a "FALSEY" award this year.

    There should be an annual award ceremony for the organisation or individual who comes up with the best false narrative during the year.

    So far the FED and Chairman Jay are in the lead with the wonderful and convincing

    "Any Inflation will be temprary" narrative

    Designed I presume to convince the bondholders not to make another break out attempt from the great bond gulag.

    Yes...it appears Jay is in line for a "FALSEY" award this year.


  15. THE FED AS SQUEEZER IN CHIEF So the Fed has provided the banks with an avalanche of cheap money. Which they have lent out to various family offices and hedge funds to ramp stocks and short squeeze the shorts. Im sure everything will work out fine. Leverage is good and makes you sleep soundly. (Sarcasm alert)
  16. HOW TO AVOID BAG HOLDERDOM 101 JPM and the Goldmember are experts at avoiding bag holderdom. The others (especially the swiss) not so much. They are obviously not keeping the toxic stuff on their balance sheet, and if they have to they buy downside protection as cheaply as possible. The game is to pass the stinky stuff on as quickly as possible and just keep the transaction fees. The game in financial assets is to take the return and pass the risk onto someone else.
  17. THE GAME RIGHT NOW The game right now seems to be trying to short squeeze the shorts out of their positions How many other hedge funds are playing the Archegos game. Using total return swaps to disguise their positions. Using 10 to 1 leverage provided by the banks to provide the power for the "pump engine". Coasting on the inflationary gift of negative real rates provided by the FED. A gift that the FED is in the process of ramping up. This is what I call a "Frame congruent game". i.e, the game is favoured by the frame forces.
  18. ARCHEGOS AND THE GREAT CASHING OUT I cant but think that the Archegos buying provided a perfect opportunity for insiders of the bought companies to cash out. Put up $10 Billion borrowed $50 Billion.....buy buy buy. Wonderful oportunity for insiders to cash out at top prices. If they were presented with such an opportunity woundnt they take it??????
  19. GAMESTOP DOES A SECONDARY As I advised weeks ago the most shorted companies will cash in with secondaries to provide the stock for the Long short funds to unwind their shorts.
  20. WHAT ASSET HAS THE HIGHEST IG NUMBER Its housing. Thats why its rocketing. With inflation over 30 years most of the the value of the house is gifted to the owner. A 30 Year fixed rate mortgage gives it the highest Inflationary gift number of any investment. Its basically an Inverse 30 Year treasury bond. Its like investing in a 30 year treasury bond Inverse ETF but with almost nil transaction costs!!!!! 2021 is the inverse of 1982 (the greatest year to invest in bonds). Also you can HELOC your gains out every year and use it as a form of annual income.
  21. THE GREAT SPAC ATTACK Usually at this stage of the proceedings the Big Wall Street Banks would be bringing public any old garbage and feasting on IPO fees and recording record profits. They seem to have restrained themselves this time round and left the garbage to be brought public via the SPAC's.
  22. I THINK WE KNOW WHO THE BAG HOLDERS ARE Bond holders are the designated Bag Holders.
  23. YES...THE GREAT MORTGAGE FINE FEST Wonderful memories...the great mortgage fine fest. BAC got taken for $60 Billion almost half the total fines of $150 Billion. All because they took over Merrill Lynch and Countrywide. Toxic garbage takeovers. Basically they bailed out the Government who otherwise would have been left holding the bag. Both terrible deals for BAC. Suggestion to BAC for the next financial crisis: If the government approaches you to takeover a failing Bank just say no. If they make you an offer you "cant refuse" make sure the agreement
  24. HOW WEWORK AND ROBINHOOD INSIDERS WILL CASH OUT The insiders at Wework and Robinhood are in a very tight spot. The companies lose oodles of money and they can't cash out in the normal IPO process. The Big Wall street banks are reluctant to lend their imprematuer to IPO's that will likely bomb. What can they do??????? Well they can follow JIMBO's patented four step process to wealth and riches. Step 1: SPAC the company. Any old rubbish can be spaced right now thanks to the FED endless print regime. Step 2: Get the Long short Hedge funds to short the hell
  25. CONTEXT IS FRAME FRAME I define as the forces acting on a market. The FRAME is constantly changing as the forces change in direction and intensity. A change In FRAME leads to a change in market direction. I.e a trend ends and is replaced by another trend. Is the 40 year bond bull market over.....YES. Helped greatly by the Government desire to defecit spend to keep the consumption party going. And the FED's willingness to print to fund such a party. And the growing unwillingness of other actors to own bonds and fund the party. A set of forces that ha
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